Best Buy and GameStop can now sell Microsoft’s Xbox 360 for $99 too

MS gives you a deal on hardware if you pay for monthly Xbox Live Gold service.

About a month ago, Microsoft started offering a deal to customers of its brick-and-mortar stores: you can get a 4GB Xbox 360 with a Kinect sensor for $99, if you also buy a two-year service contract for Microsoft’s Xbox Live Gold at $15 per month. Today, Microsoft announced that US Best Buy and certain (but not all) GameStop stores wouldn’t be left selling $299 versions of the same hardware bundle. Those outlets will be allowed to make the same offer.

A Live Gold membership usually costs $60 per year (or $5 per month) with a $299 Xbox bundle. If you’re going to buy an Xbox with a Live Gold membership and you don’t like the idea of locking yourself into a two-year contract for a gaming console, then you should probably just put down the $300 up front and save $40 for the same service. If you’d rather not pay that money up front, then the discounted hardware plan is the way to go.

Perhaps getting used to such a system isn’t a bad idea—Microsoft has consistently referred to this new pricing scheme as a “pilot program.” This may be the way the company wants to position Xbox pricing in the future. “A new content plan could help position the Xbox much more directly as a full-service living room entertainment center, rather than primarily as a video game system,” Ars Gaming Editor Kyle Orland wrote in May. “That's a transition Microsoft has been signaling for years with its slow accumulation of online entertainment apps, and one that seems somewhat natural given that entertainment apps are already more popular than online gaming on the Xbox 360.”

At any rate, the pricing plan isn't going anywhere. As Don Mattrick (head of Microsoft's gaming business) told Nasdaq.com: "Customers have so far responded well to the new pricing program, though it's still in its pilot phase."

Promoted Comments

This *is* a loan. At 9% APR (calculation). Ok, maybe you could do a little better going to a credit union and getting 6% on an unsecured loan, but it's not like this is some astronomical interest rate. It is in Microsoft's interest to get more Xboxes out there, so they're not profiteering on the financing.

tl;dr: $40 in interest to finance a $400 system and service over two years is not usury.

So $99 Plus the $15 per month for 2 years works out to approximately $460 (before taxes)...if anyone actually falls for this, they need to have all financial responsibilities revoked. Terrible terrible plan.

Buy it outright? $300 for the console (which comes with a 3 month XBL Gold Subscription) plus $5 per month for 21 months works out to $405. If you get the Xbox without Kinect or a smaller internal hard drive, you can get the base console for cheaper. Save up the money and just buy the darn thing outright.

So $99 Plus the $15 per month for 2 years works out to approximately $460 (before taxes)...if anyone actually falls for this, they need to have all financial responsibilities revoked. Terrible terrible plan.

Buy it outright? $300 for the console (which comes with a 3 month XBL Gold Subscription) plus $5 per month for 21 months works out to $405. If you get the Xbox without Kinect or a smaller internal hard drive, you can get the base console for cheaper. Save up the money and just buy the darn thing outright.

Hopefully you buy all your cellphones unsubsidized too!

This is for the crowd that would like spread out payments. There are people that want that...

So $99 Plus the $15 per month for 2 years works out to approximately $460 (before taxes)...if anyone actually falls for this, they need to have all financial responsibilities revoked. Terrible terrible plan.

Buy it outright? $300 for the console (which comes with a 3 month XBL Gold Subscription) plus $5 per month for 21 months works out to $405. If you get the Xbox without Kinect or a smaller internal hard drive, you can get the base console for cheaper. Save up the money and just buy the darn thing outright.

Hopefully you buy all your cellphones unsubsidized too!

This is for the crowd that would like spread out payments. There are people that want that...

Indeed.

But there's always some guy (or gal, I imagine) who is going to want to be the first to let you know you're stupid for not buying things they way they would.

So $99 Plus the $15 per month for 2 years works out to approximately $460 (before taxes)...if anyone actually falls for this, they need to have all financial responsibilities revoked. Terrible terrible plan.

Buy it outright? $300 for the console (which comes with a 3 month XBL Gold Subscription) plus $5 per month for 21 months works out to $405. If you get the Xbox without Kinect or a smaller internal hard drive, you can get the base console for cheaper. Save up the money and just buy the darn thing outright.

Anyone who doesn't understand time value of money should have their anonymous, uninformed internet commenter license revoked.

This *is* a loan. At 9% APR (calculation). Ok, maybe you could do a little better going to a credit union and getting 6% on an unsecured loan, but it's not like this is some astronomical interest rate. It is in Microsoft's interest to get more Xboxes out there, so they're not profiteering on the financing.

tl;dr: $40 in interest to finance a $400 system and service over two years is not usury.

It's worse than just a $55 finance charge though: Gold cards can often be found for ~$40, making the difference closer to $100. Plus at those times when the console goes on sale you'd pay less and/or get extra games.

Microsoft is probably testing this model to see if it would work for the next Xbox. Instead of selling it up front for ~$500, sell it for $200 plus contract. It would probably lead to higher Xbox v.Next adoption than only selling it for ~$500.

So I'd be paying ~$60 to borrow ~$400?. And that is spread out over a couple years? I can see some people biting. I already have a complete Xbox system. But I've spent more than $60 at the local Dave and Busters.

For those that really think this is a bad deal, your partially right. In reality for those that tend to buy a majority of Christmas presents on a credit card or through a ordering outlet that allows payments (QVC, HSN etc...) this really is not that bad of a deal. You save a ton of up front costs and spread out the remainder over 2 years at $15 a year. Not a lot you can get at that price. Now the overall cost is higher than the up front cost for sure, but if you have ever looked at a Rent a Center or Aarons Rental Advert, you can quickly do the math and see how this same $300 system will cost you over $800 when rent to owned from one of these style of places.

So if you really think this is a terrible idea, then you have more disposable income than the majority of the nation at the moment.

This program has worked well for cell phones. I can't imagine why it won't work well for consoles.

I'll set aside the necessity versus luxury debate; I think consoles are much more the luxury item and not where you should be taking "loans" out to acquire. YMMV.

For many cell phones you can't even buy them unsubsidized for some period of time. And if you are buying them subsidized, the monthly fee does not go down after your contract is up, in many cases. That is, if you plan to stay with the same carrier, you may be leaving money on the table if you DON'T upgrade after your contract is up.

For game consoles, the head unit is just the beginning. If you need to take a "loan" to get a $400.00 dollar item, are you going to be in the position to fork out $40.00 per game or $20 per month though Game Fly to make use of it? If you are going to take out a loan, can't you do better through promotions ala Bill Me Later, your current credit card, or some box stores that offer 0% interest for the first x months? What about the used market?

Sure, the $99 offer may fit someone's needs. But do you really think it is worthwhile to be on the hook for a gaming system for two years?

For those that really think this is a bad deal, your partially right. In reality for those that tend to buy a majority of Christmas presents on a credit card or through a ordering outlet that allows payments (QVC, HSN etc...) this really is not that bad of a deal. You save a ton of up front costs and spread out the remainder over 2 years at $15 a year. Not a lot you can get at that price. Now the overall cost is higher than the up front cost for sure, but if you have ever looked at a Rent a Center or Aarons Rental Advert, you can quickly do the math and see how this same $300 system will cost you over $800 when rent to owned from one of these style of places.

So if you really think this is a terrible idea, then you have more disposable income than the majority of the nation at the moment.

You take a loan here, and a loan there, and soon you're putting away 400USD a month servicing your debt.

As your loans are paid off, you make new loans, since you never have any disposable income. That's how you end up paying 15% more for all your purchases. (15%, because 60USD is the 15% you're paying more for this Xbox)

How about this for an idea: Save up for the stuff you want, and you'll end up having that extra money you save each month to purchase better stuff.

I'm not against the notion to make a loan for a good deal, that may work out for you in the long run. But this Xbox price is quite obviously not a good deal.

Or, if people want to do this for whatever reason they may have (instant gratification, don't have the money, etc) and not be denigrated or called idiots. This is probably a good deal to a great many people who couldn't otherwise afford it and feel that an XBox, however much a luxury item, is high on their list of necessities. I don't think anyone really needs the holier-than-thou attitude in this thread--if they do, they can go over to the Consumerist where they can be viciously berated for having a credit card or something. Who am I to judge them?

I guess people don't like being told not to take up more debt when they're poor, can't blame them. Claiming that some people might not be able to afford it otherwise is bullshit, they end up paying more, so obviously they can. 460USD is more than 400USD. Yeah they get it now rather than later. But if you keep taking up loans with that reasoning, you end up in an endless spiral servicing your debt, and interest on that debt.

You take a loan here, and a loan there, and soon you're putting away 400USD a month servicing your debt.

As your loans are paid off, you make new loans, since you never have any disposable income. That's how you end up paying 15% more for all your purchases. (15%, because 60USD is the 15% you're paying more for this Xbox)

How about this for an idea: Save up for the stuff you want, and you'll end up having that extra money you save each month to purchase better stuff.

I'm not against the notion to make a loan for a good deal, that may work out for you in the long run. But this Xbox price is quite obviously not a good deal.

I think the real question is: are you really so desperate to make this seem like a bad deal that you'll fudge the math?

I think it's funny that everyone railing against this offer "forgets" the $40-50 cost of the 2 year warranty that it includes for both the 360 and the Kinect.

Another option, using Best Buy as an example, is to get their 0% financing offer. Select the XBox you want, Live cards, and a game for a total of at least $429. Now you can pay it over 18 months with nothing down for about $20 per month.

I wish this was accurately headlined by media outlets as a package/bundle deal no different than a cell phone plan that requires 2 year activation (which is obviously what this is based on). This isn't a good deal.

All of the true penny pinchers would probably buy a used 360 as several places are only $89 with 3-12 month warranties on them. Plus like some said, gold subscriptions for me always tend to be $40 as I wait until the last minute to renew it and a Microsoft employee always manages to cute me a deal (3 years straight now )

I can understand why someone in college might decide this is a good idea, but I shudder at the thought of their 360 getting stolen and still having to pay for it

All of the true penny pinchers would probably buy a used 360 as several places are only $89 with 3-12 month warranties on them. Plus like some said, gold subscriptions for me always tend to be $40 as I wait until the last minute to renew it and a Microsoft employee always manages to cute me a deal (3 years straight now )

I can understand why someone in college might decide this is a good idea, but I shudder at the thought of their 360 getting stolen and still having to pay for it

Depends on what you consider "value". As someone who has purchased used systems in the past, even with a warranty, it's not worth it. Most warranties have exclusions. Most used systems work sub-optimally.

If I planned on buying a system, only had $100 in my pocket, and planned on getting a Gold subscription, a $40 fee charge with an extended warranty is totally worth it.

Now, I'm not that person, and I have the cash-dollars to buy it outright, so its dumb for me. But for someone who only has $100 cash and plans on getting XBL Gold, it totally makes sense OVER a used system.

This *loan* costs the customer approximately 20.56 over the course of two years. If you were to have the 460$ and take out the upfront cost of 114$ for the purchase and monthly membership, and deposit the rest into a savings acct of 2% interest(quarterly); ((I just looked up that rate today for my area)), the total interest gained over the two year period(taking out the 15$ monthly), adds up to 28.44 in interest.Do the same thing with the 420$ total cost over two years, taking out the upfront cost of 299(3 months), using the same bank acct, the difference in total cost MINUS total interest gained from the bank account ends up being 20.56.

So a *loan* of 460$ over the course of two years costs 20.56. Microsoft might be getting 9% on their *loan*, or 40$ extra profit, but if taking that same method from the customers point of view shows that the numbers can be completely different.

I LOVE how people make decisions based on 1 sided stories and examples. I would take the 99$ deal.

For those that really think this is a bad deal, your partially right. In reality for those that tend to buy a majority of Christmas presents on a credit card or through a ordering outlet that allows payments (QVC, HSN etc...) this really is not that bad of a deal. You save a ton of up front costs and spread out the remainder over 2 years at $15 a year. Not a lot you can get at that price. Now the overall cost is higher than the up front cost for sure, but if you have ever looked at a Rent a Center or Aarons Rental Advert, you can quickly do the math and see how this same $300 system will cost you over $800 when rent to owned from one of these style of places.

So if you really think this is a terrible idea, then you have more disposable income than the majority of the nation at the moment.

Yes, this is true. However, since some people with an already limited income can't even afford these small monthly payments (and I do know a few myself!) it's good when you plan your limited budget ahead, but not so wise when you consider it an impulse buy. If you can afford it buy it, but if you can't, wait. It's as simple as that.

This *loan* costs the customer approximately 20.56 over the course of two years. If you were to have the 460$ and take out the upfront cost of 114$ for the purchase and monthly membership, and deposit the rest into a savings acct of 2% interest(quarterly); ((I just looked up that rate today for my area)), the total interest gained over the two year period(taking out the 15$ monthly), adds up to 28.44 in interest.Do the same thing with the 420$ total cost over two years, taking out the upfront cost of 299(3 months), using the same bank acct, the difference in total cost MINUS total interest gained from the bank account ends up being 20.56. ... .

Live Gold cards are $40-50 each, not the $60 list price. Also, your $380-400 gets you _27_ months of Live since the console comes with 3 months. So the difference using your method is $40-60+, with 3 extra months of Live (say another $10) .

If you use a platinum Visa you also get the second year warranty from the card, so you don't need MS' extended warranty.

And if you watch for a sale, you can save another $50+ on the console in cash or store gift cards.

The $99 + $360 deal isn't horribly bad, but with a little patience and planning you can save $100+ by staying away from it.

you're paying less than $2 extra a month ($40 to $60 extra to get the discounted price and spread out over 2 years) to get the $115 ($100 + 15) price. that's a win in lots of people's book. and saving $200+ upfront which can be used to buy a lot of things.

This isn't a bad deal because of the amount of extra money spent, but because the Xbox 360 is a 7 year old system. I don't think it was ever intended to be high volume, especially since you can get a used 360 for far cheaper. But the process of actually doing it will be a learning lesson for Microsoft.

The goal of this however is clear. The next Xbox is going to be expensive to buy outright, and if you only end up paying an extra $50-100 to get it 2 years earlier than you normally would have buy saving up, then that's a benefit to both you and Microsoft. $400-500 for a system is going to be a tough pill to swallow.